Agent pleads with OTM members to put aside their financial interests and ‘Vote No’ to flotation

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An agent is launching a “Vote No” campaign aimed at persuading fellow members of OnTheMarket to vote against a flotation, and put aside their own financial interests in gaining shares.

He is also calling for much more discussion among agents about the issues involved, including mutuality, the proposed dropping of the one other portal rule, and the seeking of investment capital via AIM.

Graeme Lumsden is a Gold member agent and says he has been a passionate supporter of OTM from day one.

However, he says that the proposed float looks like an exit strategy and not a new beginning. He is also concerned that allowing online agents another platform post-float has implications for the entire future of the industry.

He says: “Members need to action a pause and collectively agree the best way forward with less focus on personal potential share value gain and more focus on our industry gain.

“I make no apologies for my NO vote.”

In an email flyer being sent round to OTM members, the veteran agent, with 30 years in the industry, makes clear that his views are personal.

He says that at the roadshow he attended, he questioned the amount of detail provided about the financial benefits to members of a float – yet, he claims there was “distinctly less detail” on “post Agents’ Mutual estate agency member-only mutual ownership”.

He goes on to express “very real concerns at the sheer level of financial reward” due to be reaped by Springett and the board.

Lumsden also expresses concern as to what he calls the “unknown element” – the influence of the new investors if a successful IPO is achieved.

He says in the leaflet that OTM has failed to deliver and that its performance to date has been “lacklustre”.

However, he says that a float will not be a magic bullet, saying: “Sorry Ian, I and it appears many other members want to retain our founding mutual member status [and] explore a re-direction of OTM/AM.”

He says that members are being asked to vote on the IPO proposals with “lack of real detail/strategy as to how our industry moves forward . . . I have the distinct impression that this process appears much more of an exit strategy than a new beginning for OnTheMarket.”

He continues: “Many agree that Rightmove is suffocating our industry, yet they are basically an online advertising portal. However, they now appear to dictate how our industry is promoted and in some aspects run.”

He goes on: “I would ask all members voting to balance any potential share returns versus the opportunity to have a real involvement in a relaunch of our UK property industry.”

Lumsden says agents who vote yes are being “offered the lure of member shares/financial benefits post-flotation”.

Calling for members to make their vote count, he says: “I would ask all members voting to balance any potential share returns versus the opportunity to have a real involvement in a relaunch of our UK property industry.”

He concludes: “Whether we tackle the shortcomings of OnTheMarket, the unchallenged dominance of Rightmove, or the convenient confusion created by online property listers claiming to be estate agents – whatever we choose to do, we need to action it rather than talk endlessly about what we are going to do – yet never actually do it.”

Lumsden can be contacted by email at support@theestateagencyindustry.co.uk

The mutual bit of Agents Mutual is the valuable bit, it is the achievement, it is, in business terms, ‘the company’. Mutuality gives its agent owners a say over it’s direction and so a say in its future.

On the market is the product, its value lies in its success. It is important that both AM and OTM are viewed as individual entities and their value is not morphed together as one

If a company builds a product and it isn’t quite right the company has the opportunity of building another product, it can do something else. The first reaction to a difficult launch or a product launch isn’t to immediately float the firm and pass control over to a new board and in part new owners. For one thing he price will never be a good as when the product is strong.

My view is explore all of the options for funding before going down a single route in a hurry, over the period of the school holidays when some won’t have been able to attend the roadshow. Get the product right, get the product strong and get the timing right. £50 million is a lot a money but not outside the reach of those who have the future and mutual benefit of he industry as a key driver

I won’t hide I now have a cirrus system that I feel will help all of the decent stakeholders in the industry. That includes portals, corporate agents and some non traditional estate agents. It is a system to float above the software houses, portals and proptech firms as long as those suppliers are working in the interest of their agent clients.

Although much is made of the Duopoly and fears for the future, the duopoly is now broken; for 30 months 27% of agents have either managed without one of the main two portals or have discovered the need for the both.

Removing the OOPR without a float seems a very cost effective way forward, that costs nothing but agreement fro the members. The one thing acknowledged as preventing agents from joining or restricting some members so much as to prompt a court case could be removed without cost.

My view is remove the OOPR and allow proper time to consider the effects of float and the timing of the float.

The numbers I have run for show that fee erosion from disruptor agencies that are reliant on share trading, bank loans and investors to subsidise un-economic fee structure is far more costly and far more damaging to the industry than and rise in subscriptions any portal could justify.

Fee erosion costs £281 per 0.1% reduction in fees. According to the numbers supplied by the disruptor agents since 2011 fees have reduced from 1.8%, the ASA now accept 1.3% is the average. That 0.5% wiped of fees by changes in the market, costs £1400 per sale. A typical 1 a week office has lost over £72,000 a year in fee erosion in the past 6 years.

the numbers I have made available to myself show a true picture of what is going on. I’m unimpressed by listing volumes as a measure of anything. Estate agency is the business of selling property not listing it. Those agents using someone else’s money to support loss leading fees are proving the un-viability of the model. Listing stuff on the internet as all agents have to do to sell property isn’t working and isn’t viable More and more that is becoming evident.

Good points Robert, worthy as always of discussion… however, if the existing Agents Mutual Members (unhappy with the Float Option placed before them) do not submit their VOTE NO, then in my view we may as well retire our keyboards as discussions will be merely that, no more than discussions.

The Action that is required from unhappy AM Members is to Vote NO… let’s then use that pause as an opportunity to rethink how AM/OTM moves forward, and whether The Members will have a real voice, rather than a classroom receiving a very singular point of view from their Lecturer (replace Lecturer with… IS & The Board).

I am surprised the options for financing the £50 million have been limited to an IPO. It is huge amount of money in one sense but if the Quirky cash furnace is worth £9,000,000, collectively AM branches are worth about £57.6 billion!

The first reaction to a difficult launch or a product launch isn’t to immediately float the firm and pass control over to a new board and in part new owners. For one thing the price will never be a good as when the product is strong.

Couldn’t agree more! There is so much more that can yet be done to make the product stronger, better known, more sustainable and ultimately far more valuable to everyone of the owners.

It seemed to me, reminiscent of George Osbourn, pre the #Brexit vote, statements………

Several people asked at my meeting. What are the plans if people Vote no. He was asked more than once as people did not think he answered. Basically, he has no plan B.

I am not dead against the idea, but I would of liked to hear, what plan there is to drive the business forward, if we vote now. For many of the things they want to do, if we vote yes. They can do anyway.

Add New Homes. Sell Advertising, offer incentives , free for new Companies to join, scrap one other agent etc etc. They can do all of this now, with our permission. Yes they won’t have the cash to take on RM. But its only been running 2 and a bit years. In that time, we have had #brexit. I particularily dislike, online agents joining, for that reason, keeping control seems important.

When you think of it, the launch of the site has been a success. How big was RM in 2 years or findaproperty? These are difficult times. I agree a re-think is in order. Then in a years time, if the only option is to float, then float. But by this time, I would expect to see new leaders at the helm. This does have a whiff of a big payout, for failure/quitting to me (for one person).

Agreed Graeme. We’re founding Gold members who joined due to the original founding principles. We’re voting NO. I cannot see why a group of Independent Agents would want to be lined up on a portal where PB have access amongst others. We are independent and need to differentiate.

WOW , i cant believe people have so much front. People say agents are dodgy?? How can we be , we let rightmove and zoopla tax us while they support Purplebricks to kill our business models and now on the market have sold you down the river.

maybe its members should be refunded for falling for this PIP scheme for agents. i would only back it if the fat cats agree to only take profits once they have taken 20% off rightmoves income..after all thats what it was supposed to do when it got us all to join.

Excellent initiative – but dare I say it, too late. My concern is that the Board – which must share most of the blame (don’t keep whacking IS) for the desultory performance of OTM over the last year or so – will be rallying the troops to make sure the vote goes their way. If you object to the IPO, ‘No’ voters MUST actually vote as an abstention only boosts the ‘Yes’ votes. I was pestered by AM admin people for my feedback after the meeting I attended and told them I was sitting firmly only the fence until the last minute. Since then, nothing. I’d be interested whether other posters have been contacted and what transpired.

I too was contacted the following day to ask which way I was going to vote. I explained I was on the fence. All the reasons for me joining as a Gold Member are being abandoned. Additionally, since marketing started again by AM, I am now receiving as many leads over the last week daily as I receive from Rightmove and they are of a good quality !! So something must work, just need to drive it forward and give other agents an incentive to join – maybe a back-end office system the helps their business ?What are the software developers employed by AM working on now – maybe would help recruitment by more positive messages coming out rather than all of the negativity shown over the last 12 months.Also, are the Corporate Agents only interested in joining if we give them a massive financial incentive with FREE shares ? I personally do not think this is the way forward !

As a mutual, owned by it’s customers, OTM could become THE DISRUPTER PORTAL by becoming indistinguishable from what it’s members offer and using intelligent products to drive new leads and new business to them.

No other portal can do that ,because they have vested interests with other parties such as online listers.

At the presentation were told to trust the board because of their eminent brands. It wad not made clear how much they benefit financially from the share issue.

This is misleading and a blatant conflict of interests. Considering how badly OTM had done surely the board and springet should be throwing in some of their shares instead of being so highly rewarded for failure.

Should they have spent so much time and OTM money on this proposal instead of focusing on delivering what they promised?

They could be accusing of self interest. I think they should reduce their take or we all vote no as a vote of no confidence and appoint a new board. Get rid of these wannabe fat cats.

IS is far too smug for my liking when he nods and says he’d make £20m as the deal that was agreed. Let’s cancel his contract and negotiate a new deal before any floatation and put that money into marketing, or increase the shares retained by us agent’s.

Self serving board and management should go.

Have you ever been paid £20m for failing too deliver on your promises?

It is a blatant con trick. I’d rather trust Zoopla or rightmove, at least we know where wee stand with them.

Lets get Nick Salmon on the board to represent our interests. We simply can’t trust IS any longer.

Just an observation here regarding the float of OTM…am I the only individual to note that Zeus Capital who are handling the flotation were also the firm who handled the flotation of our friends in Purple? This might mean nothing, however as part of the flotation they are allowing onliners to list their stock on the website too.

Also, perhaps my Inspector Gadget hat has gone into overdrive here, but it was also Zeus Capital that sold the shares for the Bruce brothers earlier this year for £17m between them – before long maybe we will see a change of name for OTM to On The Purple Market? As I said, just observing.

Mutual in this context should mean mutually beneficial to all parties and it is generally accepted that as a mutual the distribution of benefit should be equal to all concerned.

The CEO alone will own 8% of the overall shares (4m/50m) and voting rights – very significant and very dangerous.

I’ve said in previous posts that once city investors get their teeth into this company, a second and possibly a third funding round will follow and EA shareholders will find that their shareholdings will be diluted further to the point where collectively they will not have a majority and therefore will lose control of the company and future decisions.

All – please consider the paltry value of selling your shares once versus the higher value of not paying ever increasing portal fees for years to come assuming of course that there is a belief in the long term of OTM.

Call me a cynic but, I’m surprised that no one appears to have mentioned that Zeuss Capital is the same firm that has a strong interest in and association with Purplebricks PLC, along with a certain Mr Woodford.And who will (apparently) been representing the smaller agents on the board after the float? It seems it will be a certain Mr Mark Hayward FNAEA, who is on record as having praised Purplebricks for its transparency at a paid event and sat happily by whilst the PLC has made misleading claims (see AASA rulings) disadvantaging NAEA members and trading whilst, seemingly, having no redress membership for hundreds of its LPEs’ (pre June 2016) and continues to have no traceable memberships of ICO or AML registration for well over 100 recently checked LPEs’.

Perhaps OTM will be a route for Messrs Bruce Brothers and Woodford to own a significant stake in their own portal?

Be careful what you wish for……..OTM would blend very nicely with the PB platform with a few tweeks and a re brand. It could then act as an insider recruitment platform for further PB local agents, perhaps those sole traders/partnerships who are struggling in the market place?

My only wish is that all agents trade fairly and legitimately whilst looking after their customers best interests. If they do that, I couldn’t give a stuff over who owns what or what business model they are using.

Most agents have always been and are most likely to continue to be parochial and to ensure number one is looked after whether that is the firm itself or the monetary or geographical sector of the market group to which they belong. There’s nothing intrinsically wrong with that but any portal run by agents will always have that as its most challenging problem. Floating on the stock market simply defeats the object of the initial premise in my opinion. Unless you are a member of the board standing to trouser a small fortune overnight, it doesn’t seem to offer much for the wider membership.

Alternatively, we could make it clear to the OTM Board that the ONLY way we will back this (if that is what we are minded to do) is to continue preventing PB and the like from becoming members thereby permitting them to destroy traditional agency by using OTM as a Trojan horse.

In either above example, say 1000 Members actually VOTE NO – those Members win! …from what I see/hear, that seems entirely achievable. Let’s do what we do for a living… Communicate… however on this occasion let’s Communicate with Each Other!

So, whichever way one views the “Vote” it is THE opportunity to Vote. Every single Vote counts! …..and as Mr Springett has clearly indicated he will be Voting Yes & personally I will be Voting NO I know this…..

I would much rather be a Member of the NO VOTE seeking to exceed 25% …than the Yes Vote that seeks to hit 75%.

All the discussion & words in the world carry nothing as the power of placing your Vote in this defining moment of Agents Mutual/OnTheMarket’s relatively short history.

Agents Mutual/OnTheMarket has a alternative future in my view which doesn’t need an IPO at present… however if the unhappy existing Mutual Members don’t cast their Vote NO then the future falls from the existing “Members” influence …and lands firmly in the hands of shareholders who some may say… took they keys of the car and drove off with it!

I respect every Members right to place their own choice of Vote, however Ian Springett & Co have only given the Yes Vote a voice.

The Headline of this Article which Ros/Property Industry Eye has highlighted is “Agents Mutual Member pleads…..”

….that Member is me, and I am pleading… Vote NO. Let’s Vote to Kickstart Agents Mutual/OnTheMarket.

Well done Graeme for putting your head above the parapet. Agree with all that you say for I was as cynical as you when all this kicked off but more so now. Clever well thought out move by “the board”…….let’s call some meetings quick as you can chaps when most people are away on holidays and a lot won’t be able to attend. Give em a tight deadline too to make up their minds and send them a big bundle of clever legal speak papers most won’t understand. Trust me I’ve done it before and I (whoops we) will win”. Mr Springett, don’t forget that the bulk of your members have single office practices with partners/owners still out there at the coal face. Some respect please and put the brakes on please.

Oh and Graeme, I trust you will be suing “EYE” when they describe you as “veteran agent with 30 years in the industry”. A mere beginner for I have over 50 years so what does that make me……yeh yeh “stupid”, I know.

nickthehousewales… buy a bigger spade & dig much harder… you must be digging your tunnel from this industry with a Spoon!

Seriously though, all those independent agents who supported Agents Mutual/OTM have no requirement to be veterans, merely “real” estate agents who want to be part of Our Industry.

I just happen to be still here getting older… mind you, at the AM/OTM Roadshow it was good to see the “old faces” and think “I’m not wearing too badly”, more importantly I was taken with the passion/knowledge/engagement from clearly “less veteran” agents – it bodes well for Our Industry. I appreciate Online/Virtual/Hybrid formats have a place, in the right format, fully serving clients …however we still need “real” estate agents.

GPL – It is heartening to know that there are people out there with enough sense to see this for what it is. Even more heartening to know there are people out there with enough passion to stand up and do something about it (you) rather than the usual apathy we see in our industry.

I joined OTM because when all was said and done, and despite the mistakes, i agree with the principle. – break the dupoly, control the portal, dont’ allow online agents. promises that have all now been betrayed.

To quote somebody else, “i would rather be captain of my own canoe than cabin boy on a cruiser”

A request… thank you in advance if you can assist… I need kindling for my fire

I thought a discarded Contact Email List for the UK AM/OTM Members would be ideal.

On receipt I can print and use it to help light my fire, obviously no Data Protection issues as I am using it to light my fire (picture of my solid fuel fire available on request as proof – see DowlingStoves).

Voting NO is the vote for the future of Independent estate agency, our livelihoods and the industry.

AM and OTM can and will work……and as Robert said earlier, become imminently more valuable in the future after it has been run by a board with new ideas, new impetus and true belief in the core principles of the cause.

Whilst this may not make me popular on this thread, I am actually going to be voting yes.

My reasons for doing this are that to keep OTM as a mutual and as it stands is to see it go. The reality is, like it or not, Zoopla’s financing of the court case ended recruitment and halted growth. Likewise I also believe it’s wishful thinking to stop internet only firms advertising on OTM forever. It was defendable at the start but I think it will less so legally going forward and if a website is going to have mass appeal it has to offer the breadth of market.

It seems to me that the main aim (I know there were several at the launch) was to offer a realistic competitor to Rightmove and one where we had some control over cost. The ONLY way OTM competes, even thinks about competing is with the investment a stock market floatation offers. Yes I understand resentment at people making money from the float but in reality that is a sideshow the main issue is if we want OTM to survive and for me that means voting to bring in some cash.

RealAgent… not every Member will Vote No, clearly there will be a Yes Vote, and that is the benefit of Members freedom to choose which way to go.

I personally do not see the automatic case for “Flotation” and if we are to Float and have £50 Million Pounds to spend then I and every other Member will most likely need much, much more detail in advance on how that substantial Equity will be spent. The detail covering that proposed expenditure is one of the shortest parts of the documentation received.

The “Secret Squirrel” approach to the expenditure of the original millions raised which was directed by The Board and failed to deliver…. Members are supposed to say “Ok, take this £50 Million and have a go with this” ….it’s akin to betting on Red or Black”.

I have read documentation that has many, many more pages dedicated to the potential financial rewards for members including the very, very hefty rewards for the “Senior Table”. The Roadshow Presentation by Ian Springett, which I sat through, was a CEO making a “Float or Fail” case, a shrug of the shoulders when challenged by me at being rewarded for failure to deliver?!

Ian Springett, a polite gentleman, a skilled speaker, almost convincing as the embattled “saviour” just trying to help us climb the portal mountain? I left, as others did with the clear view that “we’re not buying what Ian is selling”.

I’m all for “Performance reaps Rewards” ….so far? ….it smacks of “Sorry, we’ve spent your money, it’s everyone else’s fault that it hasn’t worked however if you give us your Vote and tie in to pay more money…. we’ll really make it work this time?”.

Yes Agents Mutual has to change however a lorry load of money with no accountability of past performance & future direction…. I fail to see the case made for that Option.

Ah Yes…. like that goalscorer? ….if you just keeping giving them another chance they will come good? …however, you are not giving the failed goalscorer £50 Million Pounds… and if we are to believe the figures openly mentioned then our goalscorer is to be handed the potential of circa £20 Million Pounds with no goal scored, merely for opening the keys to a New Dressing Room. It’s a scary prospect! Halloween must be approaching.

So, RealAgent… I respect your Vote Yes stance… I just don’t agree with it… and that’s the joy of Forum discussions.

Likewise I respect your views GPL, but I have been an ardent supporter of OTM but even my loyalty wained against a backdrop of low leads coming through and a lack of public recognition.

I think its a fair criticism that money was squandered on a court case that frankly couldn’t be “won” even if it was “won” but there are some occasions when you have to say that you may not agree with every decision made by a board, but how on earth would it work if EVERY member needed to agree with EVERYTHING that AM/OTM did. That’s just not a workable system.

I’m not going to deny that I didn’t get a tad envious over the payouts that some MIGHT get but the counter argument to that is some of those board members put a lot more money in than I did and as far as Ian Springet is concerned, I’m not sure any of us “agents” would have had the skill to even get a portal off the ground.

Whatever your views however, I dont think you can argue that if it stays as is, then its not going to be history now or in a couple of years or at the very least a completely irrelevant portal.

To now operate in the big league we need loads of new members paying a decent price or we need a influx of investor money and quite simply can you see any new members are going to join what we have now because I can’t?

As the existing Board and Ian Springett brought us to this “Golden Gateway” based on a pretty lacklustre performance to date… Members can only work with their actual experience of what has happened – one of the major points for me? Millions of pounds however The Board or IS never thought it good practice to regularly communicate with those who had contributed in the 1st instance and then every single month… instead they ploughed on in their silent bunker.

….whether it was a Board Member putting up hundreds of thousands or a Independent Member putting up £3000 plus circa £300 every month… size doesn’t matter and if it does? then the single Independent with a much smaller pot to work with will certainly feel their money going out as much as the wealthier individual who scoops from their deep pockets.

I gawp in amazement that the deeply talented/experienced Board sauntered down into a cul de sac, despite all their business skills…. only to collectively bump into a wall and realise that they were going the wrong way?

So, they sat down and rumbled through their very deep drawer of experience and wrote to the Mutual Members with suggestions of how the business could move forward instead and get an understanding of the Membership ( that’s the workers at the coal face ) and then formulate options, and present them to The Members for a Vote?

Nope, they missed that bit out… they again opted for their own depth of experience (which we all relied out in Part 1 of AM/OTM – THE Portal Movie) and like a Magician Collective they all performed the “Sell it Now Trick”.

When The Board & Ian Springett have given a clear analysis of what they have learned from their lacklustre Part 1 and exactly how a potential Part 2 will change the future of OTM, then, in my view, The Members will have the much needed detail to either make a further commitment to OTM and it’s future or step back.

The “Float or Fail” Presentation is tainted with a distinct odour of “the big players take the money & run”.

It’s a shame that those committed Mutual Members are simply expected to fall into line behind the Losing Team.

V-Day approaches… and the one sentiment that echoes through these discussions from those committed Mutual Members is they feel that OTM can work, it does need change, investment etc… however to be offered this Option is pretty lacklustre – however we’re used to that, because we’ve already experience pretty lacklustre …and we didn’t like it then, and we don’t like it now. (when I say “We” I mean me, because I don’t speak for the other Members however I have certainly listened to them) …I wonder what might happen if The Board & IS listened to their Members?

My last vision of Ian Springett was him vanishing from the Roadshow I attended last week – it was like Magic! …there one minute, gone the next! …it was like someone had given him £20 Million Pounds and he was running for the exit!

Its not cash thats needed…its new ideas and belief. They already exist, but OTM’s board has pound note dark glasses on….the type that the guy in hitchhikers guide to the galaxy had…that turned black at any sign of danger. They are blinded to looking at any other different proposals by the thought of personal financial gain!!!

I don’t know what’s happening either (viz earlier post) but since the IPO announcement, we have also been receiving several OTM leads a day (unprecedented!!) – and good quality too! Who said this horse only had 3 legs?

Incidentally, I too would like to see how our money has been spent since inception and how the decision was made to grant all these shares to the great and the good. Where’s the transparency and accountability to us, OTM’s owner-members?

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